How a Charter-Time Warner Merger Could Help Net Neutrality

With net neutrality struck down by the courts, it's time for the government to use a potential cable merger as leverage to restore it.

Net neutrality is on the ropes. It's down but not out. Now that an appeals court in D.C. has invalidated the FCC's net neutrality rules, it's back to the drawing board for people who feel that small information services should get the same priority as big guys like Netflix and Amazon.

There might be one way the FCC can quickly regain control, though: let Time Warner and Charter, two of the nation's largest home Internet providers, merge. Just like it did with the merger of Comcast and NBC, the agency can require the merged entity to adhere to net neutrality when they combine.

Why This Merger Won't Hurt Consumers There's pretty much no competition in cable television. Both public and private actors are to blame here. Early in the development of cable TV, some cities offered monopolies to individual cable companies in exchange for guaranteeing that they'd build connections to every home in range. Later on, these monopolies became non-exclusive, but very few companies had the stomach to build out competing systems. RCN, now serving about 400,000 households, is the largest; in the San Francisco area, Astound Broadband competes with Comcast.

The government could have treated the TV cables as utilities, and just like it does with power companies in many states, required them to offer competing services, but that didn't happen. (It did happen with DSL for a while, but that ended in 2006.)

By and large, the U.S. has a set of cable companies with no overlap; they just don't compete with each other. Time Warner, Charter, and Comcast don't spur each other to lower prices or greater technical heights because almost nobody in the country gets to choose between them, and they like it that way. Sleepy and stodgy, they'd rather have small, exclusive user bases than have to fight harder for more customers.

Needless to say, this is very different from the wireless industry, where all four national players slug it out in almost all of the large metro markets. Losing even one of those four players would lead to a rise in prices and fewer chances for disruption. And it's even different from the satellite TV market, where Dish and DirecTV don't exactly try to disrupt each other, but they at least offer two competing and slightly differentiated options to the same people.

Give Something to Get SomethingLet's assume Charter and Time Warner want to merge. They certainly seem to be dancing around each other, parrying and riposting to agree on a price. The FCC and Department of Justice can set whatever conditions they want on the merger to preserve competition and the competitive nature of the Internet. So let 'em slap down a net neutrality consent agreement like the one Comcast-NBC is under until 2018.

It should be easy enough for the companies to consent because this is, after all, the status quo, and a consent agreement is unlikely to be challenged because after all, they're consenting. It isn't a perfect solution, as Verizon and AT&T wouldn't be bound by the consent agreement, and the cable companies would probably scream bloody murder that they're at a disadvantage to the fiber companies because the fiber companies will get to muck with your Internet delivery.

All the same, net neutrality is absolutely critical to the continued growth of the Internet and to our success as a democratic society. Without it, the Internet will become a series of toll roads where only Web services deep-pocketed enough to pay the providers will be able to arrive with alacrity.

I don't think Congress is going to do anything about this. I hope the Supreme Court does. But at the very least, the FCC needs to retrench and save what it can, for all of our sakes.

PCMag.com's lead mobile analyst, Sascha Segan, has reviewed hundreds of smartphones, tablets and other gadgets in more than 9 years with PCMag. He's the head of our Fastest Mobile Networks project, one of the hosts of the daily PCMag Live Web show and speaks frequently in mass media on cell-phone-related issues. His commentary has appeared on ABC, the BBC, the CBC, CNBC, CNN, Fox News, and in newspapers from San Antonio, Texas to Edmonton, Alberta.
Segan is also a multiple award-winning travel writer, having contributed...
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